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The fund normally invests at least 80% of its total assets in securities that comprise the funds benchmark index. The index includes securities of Brazilian small-capitalization companies. A company is generally considered to be a Brazilian company if it is incorporated in Brazil or is incorporated outside of Brazil but has at least 50% of its revenues/related assets in Brazil.

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Latin America Steering To The Right: From Colombia To Brazil, Things Are Changing Fast

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What The Rio Olympics Mean For Zika And Favelas

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Shares of US-listed Brazilian stocks are trading lower following Brazil's Central Bank decision.

On Monday, shares of VanEck Vectors Brazil Small-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRF#NYSE">BRF</a>) saw unusual options activity. After the option alert, the stock price moved up to $23.29. 
<ul>
<li>Sentiment: BULLISH</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2022-01-21</li>
<li>Strike Price: $24.00</li>
<li>Volume: 800</li>
<li>Open Interest: 1200</li>
</ul>
<h2>Three Indications Of Unusual Options Activity</h2>
One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
Another sign of unusual activity is the trading of a contract with an expiration date in the distant future. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Using These Strategies To Trade Options</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Options

Analyzing VanEck Vectors Brazil Small-Cap ETF's Unusual Options Activity

On Friday, shares of VanEck Vectors Brazil Small-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRF#NYSE">BRF</a>) saw unusual options activity. After the option alert, the stock price moved up to $23.29. 
<ul>
<li>Sentiment: BEARISH</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-07-16</li>
<li>Strike Price: $21.00</li>
<li>Volume: 1200</li>
<li>Open Interest: 3000</li>
</ul>
<h2>Three Indications Of Unusual Options Activity</h2>
One way options market activity can be considered unusual is when volume is exceptionally higher than its historical average. The volume of options activity refers to the number of contracts traded over a given time period. The number of unsettled contracts that have been traded, but not yet closed, is called open interest. These contracts are not yet closed because a buyer has not purchased the contract, or a seller has not sold it.
The trading of a contract with an expiration date in the distant future is another sign of unusual activity. Generally, additional time until a contract expires increases the potential for it to reach its strike price and grow its time value. Time value is important in this context because it represents the difference between the strike price and the value of the underlying asset. 
"Out of the money" contracts are unusual because they are purchased with a strike price far from the underlying asset price. "Out of the money" occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. Buyers and sellers try to take advantage of a large profit margin in these instances because they are expecting the value of the underlying asset to change dramatically in the future. 
<h2>Understanding Sentiment</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. 
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Unusual Options Activity Insight: VanEck Vectors Brazil Small-Cap ETF

The year is half over and at this point, it&#39;s accurate to say emerging stocks and the related exchange traded funds are struggling. The widely followed MSCI Emerging Markets Index is off 7.4 percent year-to-date compared to a gain of 2.5 percent for the S&amp;P 500.
Of the 20 worst-performing ETFs (excluding leveraged funds) on a percentage basis as of the end of the second quarter, 16 are emerging markets funds. At the regional level, Latin America has been particularly hard hit. Five of the 20 worst-performing ETFs through the first half of the year are single-country funds tracking Latin American economies.
On a related note, the S&amp;P Latin America 40 Index is lower by nearly 12 percent this year. What follows is a collection of five of the worst non-leveraged ETFs through the first half of 2018. Two countries account for several of the worst offenders, so the funds representing those economies are grouped together, meaning seven funds are mentioned here.
iShares MSCI Turkey ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tur#NASDAQ">TUR</a>)
On a percentage basis, the iShares MSCI Turkey ETF is the worst-performing non-leveraged ETF through the first six months of 2018. By the time the second quarter closed, TUR was sporting <a href="https://www.barchart.com/etfs-funds/performance/percent-change/declines?timeFrame=6m">a six-month loss</a> of 30.46 percent.
Turkey&#39;s currency, the lira, is one of the worst performers among emerging markets currencies this year and that&#39;s saying something as that complex has been drubbed. The central bank there recently <a href="https://www.benzinga.com/markets/18/05/11793353/whats-troubling-the-turkey-etf">raised interest rates to 8 percent,</a> but to little avail in terms of stemming the lira&#39;s slide.
President Tayyip Erdogan is a controversial figure whose efforts to consolidate power and potentially be Turkey&#39;s leader for life are seen weighing on the country&#39;s financial markets.
See Also: <a href="https://www.benzinga.com/trading-ideas/long-ideas/18/07/11962773/5-best-etfs-of-the-first-half-volatility-internet-names-rule">5 Best ETFs Of The First Half: Volatility, Internet Names Rule</a>
VanEck Vectors India Small-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/scif#NYSE">SCIF</a>)
While domestic small-cap ETFs are soaring, the opposite is true of the equivalent emerging markets funds. Including the VanEck Vectors India Small-Cap ETF, several of the worst-performing emerging markets ETFs in the first half of the year are single-country small-cap funds and SCIF isn&#39;t alone among the India offenders. Two other ETFs tracking the country&#39;s small-caps are among the 20 worst-performing ETFs in the first half of the year.
SCIF lost 28.24 percent in the first six months of 2018 and now resides almost 33 percent below its 52-week high. The slides experienced by Indian small-caps are particularly concerning when noting the country&#39;s large-caps have been significantly less worse. Fears of higher repo rates and rich valuations <a href="https://www.livemint.com/Money/9nPAaR58fZQiTLE9HZIo9M/BSE-Sensexs-mid-cap-small-cap-stocks-lose-steam-after-stel.html">are among the factors</a> hampering smaller Indian stocks this year.
iShares MSCI Argentina and Global Exposure ETF (CBOE: AGT)
The Global X Argentina ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/argt#NYSE">ARGT</a>), the largest Argentina ETF in the U.S., is barely behind the iShares MSCI Argentina and Global Exposure ETF for the dubious distinction of worst Argentina ETF in the first half of 2018.
Earlier this year, Argentina&#39;s central bank raised its benchmark lending rate to a jaw-dropping 40 percent to stave off another currency crisis. Additionally, there has been essentially no momentum for Argentine equities following the <a href="https://www.benzinga.com/trading-ideas/long-ideas/18/06/11911267/msci-lifts-argentina-saudi-arabia-to-emerging-markets-status">recent move by MSCI</a> to elevate the country to emerging markets status. The aforementioned Argentina ETFs have traded lower since that announcement.
Argentina&#39;s economy, the second-largest in South America behind Brazil, is close to entering a recession. The country recently needed $50 billion from the International Monetary Fund (IMF), a deal that was praised by global investors.
VanEck Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/brf#NYSE">BRF</a>)
Down 23.58 percent in the first six months of the year, the VanEck Vectors Brazil Small-Cap ETF isn&#39;t the only offender among Brazil small-cap funds. The iShares MSCI Brazil Small-Cap ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ewzs#NASDAQ">EWZS</a>) is lower by 23.57 percent year-to-date. Some of this is a symptom of weakness in Brazilian large caps. For example, the large-cap MSCI Brazil 25/50 Index is off almost 21 percent over the past six months.
Brazil holds national elections in early October, a factor that&#39;s already weighing on the countries equity markets.
&ldquo;Wile Brazil has recovered from the economic swoon that was triggered by the oil-market collapse in 2015 and early 2016, Latin America&#39;s biggest economy still faces a massive fiscal deficit which could pressure the economy once more,&rdquo; <a href="https://www.cnbc.com/2018/06/08/global-investors-brace-for-volatility-ahead-of-elections-flood.html">according to CNBC</a>.
VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/remx#NYSE">REMX</a>)
The VanEck Vectors Rare Earth/Strategic Metals ETF isn&#39;t alone among offending funds with exposure to strategic metals as funds with exposure to lithium and uranium, just to name a couple, also slumped in the first half.
China still controls 90 percent of the global rare earths market, but India is looking to up production of the minerals used in the production of electric vehicles, smartphones, tablets and other popular products.
Volatile prices, mining challenges and moves by end users to find substitutes are among the factors that could weigh on the rare earths market going forward.
&ldquo;Increasing demand for renewable energy such as hybrid automobiles, next generation rechargeable batteries, wind turbines, and biofuel catalysts are expected to boost growth of the rare earth metals market, which are used in such application,&rdquo; <a href="https://www.coherenttimes.org/rare-earth-metals-market-necessity-and-demand-2018-to-2026/">according to Coherent Market Insights</a>.

BRF SA Shares Up 7.0% Premarket After Late Wednesday Rumors That Former Petrobras CEO Pedro Parente Has Been Invited To Take Over As CEO

Earnings

BRF Late Thursday Reported Q1 Revenue BRL8.2B, Up 5% YoY

Anyone paying even the slightest attention to Latin America knows that the region has been experiencing a shift away from left-wing governments toward center-right-wing ones &mdash; which are considered full-blown right-wing down there. Left-wing presidents in Argentina, Brazil and Peru have been replaced by market-friendly, right-wing figures in less than a year's time.
However, the turn did not end with the replacement of left-wing governments. In fact, policy adjustments seem to have just started. Last weekend was a particularly hard one for leftist movements, as Colombians voted against its (still left-wing) president&rsquo;s proposed peace agreement that would have ended a 52-year-long war with the FARC (the last Marxist guerilla group standing in the region), and the PT (Workers Party, leftist) delivered a very poor performance in the Brazilian municipal elections.
<h3>Steering The Wheel</h3>
In a recent New York Times <a href="http://www.nytimes.com/2016/10/04/world/americas/latin-america-colombia-brazil.html?_r=0">article</a>, Simon Romero attributed this shift to the right to several factors. &ldquo;The sharp drop in commodities prices has eroded economic growth around Latin America and the support leftist governments once drew from it. The clout of evangelical Christian megachurches is expanding, and they are confronting socially liberal policies and channeling widespread dissatisfaction with the status quo.
&ldquo;But in one country after another, the results are the same: Leaders embracing market-friendly policies are eclipsing the leftists who exerted sway around the Americas in the previous decade.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8506415/exclusive-leading-latin-american-economist-shares-insights-on" title="Exclusive: Leading Latin American Economist Shares Insights On Politics, Bonds, Mining &amp; Stocks">Exclusive: Leading Latin American Economist Shares Insights On Politics, Bonds, Mining &amp; Stocks</a></bzrelatedlink>
However the trend is framed, the reality is that the region has been witnessing such oscillations for decades now. Left- and right-wing governments alternate in power every 10 to 12 years. Check out Guillermo O&rsquo;Donnell&rsquo;s books for a more developed explanation of the phenomenon.
<h3>This Weekend</h3>
The turn toward the right in Latin America has been widely discussed. But, what happened this weekend? Why did Colombians reject a peace treaty? Why did Brazilians vote against the leaders they loved not long ago?
In Colombia, people believed the deal proposed by President Juan Manuel Santos was too lenient on the FARC, as it allowed most of its members to walk. However, the vote against the president can be read under the lens of a wider trend of defying the status quo, prevalent in Latin America, specialist Michael Shifter explained. For more detailed views of the event, check out these <a href="http://www.thedailybeast.com/articles/2016/10/05/why-colombia-voted-down-peace.html">Daily Beast</a> and <a href="https://www.theguardian.com/commentisfree/2016/oct/03/why-colombians-voted-against-peace-farc-president-santos-better-deal">The Guardian</a> articles.
In Brazil, people turned toward the right after former president Dilma Rousseff was impeached on the back of allegations of mis-handling of public funds. For further information on the issue, check out this article illustrating <a href="http://www.latimes.com/world/mexico-americas/la-fg-brazil-change-since-impeachment-snap-story.html">4 ways Brazil has changed since former President Dilma Rousseff was impeached.</a>
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

	Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

With the Rio Olympics kicking off Friday, anticipation is building up and news is crowding the internet. Among much discussion, we would like to take a look into what this event means for Rio de Janeiro&rsquo;s "favelas" (slums) and for the spread of the Zika virus.
<h3>God&rsquo;s Cities</h3>
About 1.4 million people live in Rio&rsquo;s favelas. However, these previously feared areas of the city have become, in recent years, an attraction for tourists looking for more &ldquo;authentic&rdquo; experiences &mdash; like staying in the world-famous <a href="http://www.ipanema.com/pictours/ipanema.htm">Ipanema</a>.
Media have repeatedly portrayed favelas as highly dangerous places, where kids and adults own assault weapons and battle on the narrow streets. However, the situation is not quite cut and dry; as a tourist, one might feel safer in a favela than in one of the city&rsquo;s more posh neighborhoods like Copacabana.
In a recent <a href="http://www.vice.com/read/what-will-olympic-tourism-mean-for-rios-favelas">Vice</a> article, Angela Almeida and John Surico shared their takeaways from a visit to the Rocinha, Brazil&#39;s largest favela. Andr&eacute; Felix, a 25-year-old Rocinha native said the favela was receiving more tourists than ever, and thus, more attention than ever.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/06/8068681/rio-olympics-the-perfect-storm-will-the-games-be-held-anyways">Rio Olympics &amp; &#39;The Perfect Storm&#39;: Will The Games Be Held Anyways?</a></bzrelatedlink>
So, how are favela inhabitants capitalizing on this trend? For starters, accommodation offerings are booming; but also, one can find terraces with city views, walking tours, restaurants, souvenir shops&hellip;
However, the influx in tourism has also led to a rise in the cost of living in some of the most central favelas, like the Rocinha. And, let&rsquo;s not even go into the &ldquo;pacification&rdquo; initiatives that the government unfolded over the past few years &mdash; which were <a href="https://www.youtube.com/watch?v=Hh-bsz23aLQ">not at all peaceful</a>.
<h3>Zika</h3>
Another big subject related to the Olympics is the Zika virus. However, in spite of the widespread concerns, the risk is actually low. In fact, the U.S. Centers for Disease Control and Prevention recently <a href="http://www.cdc.gov/mmwr/volumes/65/wr/mm6528e1.htm">stated</a> the event actually posed little risk of new outbreaks.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/08/8307829/florida-may-consider-use-of-scientifically-engineered-mosquitoes-to-battle-zika">Florida May Consider Use Of Scientifically Engineered Mosquitoes To Battle Zika</a></bzrelatedlink>
While comforting, the CDC&rsquo;s report does not say that athletes are not at risk of contacting Zika &mdash; in reality, some might. What the note states is that holding the Olympics does not carry a large risk of generating outbreaks in countries where there hasn't already been exposure. The institutions determined that only four countries are at considerable risk as a result of the games: Chad, Djibouti, Eritrea and Yemen.
Wondering what it would take for the CDC to decide the Olympics posed a threat to health, scientists have taken a keen interest in forming multiple hypotheses. To lead study author and CDC health scientist Ardath Grills and her team, the answer was pretty clear: A less global world. Anna Maria Barry-Jester explicated in a <a href="http://fivethirtyeight.com/features/why-the-olympics-probably-wont-spread-zika/">FiveThirtyEight</a> article, &ldquo;If people traveled less, only then would the additional risk of travel to Rio for the games be concerning.&rdquo;
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Disclosure: Javier Hasse holds no interest in any of the securities or entities&nbsp;mentioned above.

Brazil has seen so many changes in its political leadership. What&rsquo;s relevant to this piece is the following: Over the past couple of months, the Latin American country, which will be hosting the 2016 Summer Olympic Games in less than three months, has gone through three Sports Ministers.

	The latest, recently appointed Sports Minister, Leonardo Picciani, spoke with BBC and Reuters in the past few days &ndash; in separate occasions, and said he expects almost no Zika cases during the Olympics, assuring that the government has taken the measures necessary to control, or at least improve significantly, the situation.

	Remember, however, that in a recent <a href="http://www.rioolympicslater.org/">Open Letter</a> to Dr. Margaret Chan, Director-General of the World Health Organization, a group of more than 150 health experts waned about the situation and asked for the games to be either moved or postponed.

	Related Link: <a href="http://www.benzinga.com/news/16/06/8068681/rio-olympics-the-perfect-storm-will-the-games-be-held-anyways">Rio Olympics &amp; &#39;The Perfect Storm&#39;: Will The Games Be Held Anyways?</a>

	&quot;We hosted 43 test events in Rio with 7,000 athletes and we have not had any case of Zika or dengue,&quot; Picciani assured in a conversation with BBC Rio de Janeiro. &ldquo;We had 4,300 cases in April, which fell to 700 in May and there will be another significant reduction in June or July, and in August it will be very close to zero,&rdquo; he added.

	&ldquo;I would say to any athlete, to any visitor planning on coming to Rio, you do not have to worry, Rio and Brazil have prepared for this moment,&rdquo; the Sports Minister concluded.

	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Rio Olympics: Brazil's New Sports Minister Says Not To Worry About Zika

The Summer Olympic Games will be held in Rio de Janeiro, Brazil, starting August 5. However, the Latin American country has some pressing problems to worry about, as its economy continues to tumble, the political crisis accentuates, corruption scandals emerge over and over again, and the Zika virus continues to spread.

	Despite all these issues, the World Health Organization and the International Olympic Committee &nbsp;assure the Games will be held, even though doctors from around the globe have insisted on a postponement or change of venue.

	&ldquo;The Brazilian strain of Zika virus harms health in ways that science has not observed before. An unnecessary risk is posed when 500,000 foreign tourists from all countries attend the Games, potentially acquire that strain, and return home to places where it can become endemic. Should that happen to poor, as-yet unaffected places (e.g., most of South Asia and Africa) the suffering can be great. It is unethical to run the risk, just for Games that could proceed anyway, if postponed and/or moved,&rdquo; the <a href="http://www.rioolympicslater.org">Open Letter</a> to Dr. Margaret Chan, Director-General of the WHO, read.

	Related Link: <a href="http://www.benzinga.com/news/16/05/8019616/brazil-to-start-a-roadshow-to-privatize-state-assets">Brazil To Start A &#39;Roadshow&#39; To Privatize State Assets</a>

	On top of the trouble in Brazil, several Olympic athletes are currently facing doping allegations.

	In this context, Ed Hula, Olympics expert and founder and editor of the online publication Around the Rings, recently told <a href="http://edition.cnn.com/2016/06/03/sport/olympics-rio-2016-zika-dilma-rousseff-crisis/index.html">CNN</a>&nbsp;it all looks like &ldquo;a perfect storm&hellip; Anything bad that could happen to Rio de Janeiro seems to be happening at this point.&quot;

	In fact, a substantial number of athletes have refused to participate in the Games, while others have decided to use special uniforms that protect them against the Zika virus. However, none of this has discouraged the WHO and IOC: the Rio 2016 Olympics will be held as planned, so get your mosquito repellent and your zunga&nbsp;ready.

Rio Olympics & 'The Perfect Storm': Will The Games Be Held Anyways?

In an attempt to reduce the country&rsquo;s fiscal deficit, the Brazilian government, now led by interim President Michel Temer, will soon be hosting several investor meetings in an attempt to sell some state assets, <a href="http://www.reuters.com/article/us-brazil-privatization-idUSKCN0YE0HK">Reuters</a> reported.
As per Wellington Moreira Franco, one of the main government officials in charge of attracting foreign investment to Brazil, a round of "roadshows" (as they have been nicknamed) around the world will be used to advertise the assets included in the plan, and the conditions to acquire them. And, while the agent did not specify which assets would be sold, or when the offer would begin, other sources familiar with the issue said the presentations would take place in mid-July.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/05/8014574/may-inflation-in-brazil-hits-highest-point-in-20-years">May Inflation In Brazil Hits Highest Point In 20 Years</a></bzrelatedlink>
As stated above, the assets for sale have not been disclosed yet, but people familiar with the matter have postulated Temer wants to dispose of the state&rsquo;s majority stakes in Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>) and power utility Furnas Centrais El&eacute;tricas SA, among other state investments.
Several top line analysts and politicians have criticized the privatization wave &mdash; "privatization" is almost a bad word for many in Latin America, but Moreira Franco has assured the plan will create new jobs in a struggling Brazil. However, he has not provided an estimate of the amount that could be obtained from the asset sale &mdash; which others estimate could stand somewhere between $10 billion and $20 billion.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Rumors

Brazil To Start A 'Roadshow' To Privatize State Assets

According to data released Friday by the Brazilian Institute of Geography and Statistics (IBGE), the IPCA-15 consumer price index in Brazil rose 0.86 percent in the first half of May, marking the highest May inflation rate in 20 years. Analysts were anticipating a 0.75 to 0.77 percent surge for the month, as per <a href="http://www.reuters.com/article/brazil-economy-inflation-idUSL2N18H0FO">Reuters </a>and <a href="http://www.bloomberg.com/news/articles/2016-05-20/brazil-s-consumer-inflation-exceeds-all-estimates-in-mid-may">Bloomberg</a> data, respectively.
Over the past 12 months, inflation reached 9.62 percent, driven by higher food, and health and personal care items prices (which rose by 1.03 percent and 2.54 percent, respectively). However, the run-up was somewhat offset by lower ethanol prices and airfares, the IBGE assured.
The 12-month rate also implies a month-over-month acceleration in inflation; the 12 months between May 2015 and April 2016 saw a 9.34 percent spike in consumer prices.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/05/7995445/is-now-a-good-time-to-invest-in-brazil">Is Now A Good Time To Invest In Brazil?</a></bzrelatedlink>
The high inflation led many analysts to lower their expectations of an interest rate reduction (aimed at stimulating credit) in the upcoming months, especially as the deceleration outlook is not especially promising. As per the country&rsquo;s Central Bank data, economists expect inflation to slow down to 7 percent toward the end of the year &mdash; versus the Bank&rsquo;s target of 4.5 percent &plusmn;2, and to 5.5 percent in 2017. This would mean that the standard interest rate would fall from 14.25 percent to 13 percent.
&ldquo;The new governor is more likely to demonstrate his inflation fighting credentials and leave interest rates unchanged for longer,&rdquo; Capital Economics&rsquo; <a href="http://www.bloomberg.com/news/articles/2016-05-20/brazil-s-consumer-inflation-exceeds-all-estimates-in-mid-may">Edward Glossop</a> expounded.
<h3>Movements</h3>
Shares of the iShares MSCI Brazil Index (ETF) (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), Market Vectors Brazil Small Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) and Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) traded up on Friday. The Brazilian real gained 0.125 percent versus the U.S. dollar.
However, early Monday, Petrobaras was down 5.43 percent at $6.10, BRF was down 2.09 percent at $12.62 and EWZ was down 2.68 percent at $26.15.
	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Econ #s

May Inflation In Brazil Hits Highest Point In 20 Years

After an all-night-long, heated debate, the Brazilian Senate voted in favor of <a href="http://www.theguardian.com/world/2016/may/12/dilma-rousseff-brazil-president-impeached-senate-vote">suspending</a> President Dilma Rousseff on Thursday, giving way to an impeachment trial against her. The country&rsquo;s elected president has been accused of misappropriating funds from public banks to cover deficits in other areas, manipulating fiscal accounts in the process.
In a <a href="http://www.reuters.com/article/us-brazil-politics-idUSKCN0Y206H">55 to 22 vote</a>, the Senate decided to proceed with the impeachment process, obliging Rousseff to step down from her position for as long as 180 days while the trial takes place. Now, her only hope is that more than one third of the Senate votes against her conviction.
In the meantime, Vice-President Michel Temer has taken over as acting president of Brazil, and could permanently replace Rousseff until the end of 2018 if she were convicted.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/04/7791200/brazil-from-the-ground-part-2-what-millennials-think-of-the-crisis">Brazil From The Ground, Part 2: What Millennials Think Of The Crisis</a></bzrelatedlink>
Temer has already presented his staff, which includes a new, conservative finance minister, Henrique Meirelles; a new foreign minister, Jose Serra; and a new planning minister, Romero Juca, who incidentally is currently being investigated for his involvement in the Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>) corruption scandal. Notably, there are no women included in his 21-person cabinet.
While experts have argued that the process has been completely constitutional, many have cast doubt on the real motivations behind it, classifying it as a coup d&rsquo;&eacute;tat. And, Rousseff agrees with the latter view.
<h3>Rousseff's Comments</h3>
On Thursday, the president <a href="http://www.reuters.com/article/us-brazil-politics-idUSKCN0Y206H">addressed the nation</a> via TV and shared that, while she may have made some mistakes, she certainly &ldquo;did not violate budgetary laws.&rdquo; During the strong-worded discourse, she said the impeachment is &quot;fraudulent&quot; and described it as &quot;a coup.&quot;
&quot;What is at stake is respect for the ballot box, the sovereign will of the Brazilian people and the constitution,&rdquo; Rousseff stated. &ldquo;The struggle for democracy doesn&rsquo;t have an end date&hellip; It&rsquo;s a permanent fight that requires our constant dedication. It&rsquo;s a fight that can be won, and it is one we will win,&rdquo; she concluded.
Brazil ETFs Market Vectors Brazil Small Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) and iShares MSCI Brazil Index (ETF) (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) were trading up Thursday afternoon.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Legal

Brazilian President Rousseff Suspended, Will Face Impeachment Trial; Calls Situation A 'Coup'

Fitch Ratings has been reviewing its stance on South America.

	Between last Thursday and this Monday, the firm decided to downgrade its rating on Brazil&rsquo;s:
<ul>
<li>
		Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs), from &#39;BB+&#39; to &#39;BB,&#39; keeping a Negative Outlook.</li>
<li>
		Senior unsecured Foreign- and Local-Currency bonds, from &#39;BB+&#39; to &#39;BB.&#39;</li>
<li>
		Country Ceiling, from &#39;BBB-&#39; to &#39;BB+&#39;</li>
<li>
		Senior secured pass-through notes issued by Brazil Loan Trust I, from &#39;BB+sf&#39; to &#39;BBsf,&#39; issuing a Negative outlook. This applies to $661.9 million notes.</li>
</ul>

	In addition, analysts at Fitch downgraded six Brazilian subnationals this week. The Sao Paulo, Santa Catarina and Parana&#39;s States Issuer Default Ratings (IDRs) were cut from &#39;BB+&#39; to &#39;BB.&#39; For their part, the cities of Sao Paulo and Rio de Janeiro received the same demotion. Finally, for the state of Rio de Janeiro&rsquo;s IDRs were downgraded from from &#39;BB&rsquo; to &#39;B+.&#39; The rating outlooks remain generally Negative.

	Related Link: <a href="http://www.benzinga.com/news/16/05/7960679/the-brazilian-giver-maranh-o-goes-back-on-rousseffs-impeachment-annulment">The Brazilian Giver: Maranh&atilde;o Goes Back On Rousseff&#39;s Impeachment Annulment</a>

	According to a press release issued last week, the downgrades seek to reflect the worse-than-anticipated economic downturn, the failed attempt of the government to &ldquo;stabilize the outlook for public finances and the sustained legislative gridlock and elevated political uncertainty that are sapping domestic confidence and undermining governability as well as policy effectiveness.&rdquo; This political and economic uncertainty also granted the maintenance of the Negative Outlook. The subnational downgrades were justified by Fitch&rsquo;s belief that none of these entities can be rated higher that the sovereign.
<h3>
	Argentina: On The Other End Of The Seesaw</h3>

	Brazil&rsquo;s next-door neighbor, Argentina, is sitting on the other end of the teeter-totter. After the Southern country cured the default from 2014 and resumed debt payments to restructured bondholders, Fitch decided to upgrade its Long-Term Foreign Currency Issuer Default Rating (LT FC IDR) from &#39;RD&rsquo; to &#39;B&#39;, issuing a Stable outlook.

	The firm also upgraded Argentina&rsquo;s Short-Term FC IDR from &#39;RD&rsquo; to &#39;B,&rsquo; and reiterated a &lsquo;B&rsquo; rating on the country&rsquo;s senior unsecured foreign-currency bonds, its Long-Term Local-Currency (LC) IDR, and its Country Ceiling.

	&ldquo;In addition, Argentina&#39;s ratings reflect the improved consistency and sustainability of Argentina&#39;s policy framework, reduced external vulnerability, and the easing of external and fiscal financing constraints,&rdquo; a <a href="http://www.businesswire.com/news/home/20160510006412/en/Fitch-Upgrades-Argentinas-Foreign-Currency-IDR-Outlook">press release</a> issued Tuesday read.

	&ldquo;The Stable Outlook balances these improvements against risks related to relatively weak external liquidity, continued macroeconomic underperformance compared with peers, and deterioration of public finances in recent years. Argentina&#39;s ratings also balance structural strengths such as GDP per capita and social indicators against a weak debt repayment record.&rdquo;

	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Analyst Color

Bonds

Upgrades

Downgrades

Reiteration

Analyst Ratings

Fitch On South America's Big Economies: Shaves Brazil, Upgrades Argentina

Drama continues to unravel in Brazil.

	Until last Friday, President Dilma Rousseff&#39;s impeachment looked like a sure thing after a Senate committee recommended a trial for the infringement of budget laws. This left the head state just one step away from being suspended and replaced by Vice President Michel Temer. However, it all changed on Monday, as the acting speaker of Brazil&rsquo;s Lower House of Congress, Waldir Maranh&atilde;o, decided to annul the House&rsquo;s decision citing potential procedural irregularities.

	It wasn&#39;t completely clear what this decision meant at the time.

	Related Link: <a href="http://www.benzinga.com/news/16/05/7953055/rousseff-impeachment-vote-surprisingly-annulled">Rousseff Impeachment Vote Surprisingly Annulled</a>

	These questions no longer matter, because less than 24 hours after he announced the annulment, Maranh&atilde;o decided to go back on his words, withdrawing his motion to dismiss the Lower House&rsquo;s decision.

	According to schedule, the Senate will vote on Rousseff&rsquo;s impeachment process on Wednesday, and the odds are against her &ndash; it&#39;s said at least 50.6 percent of the votes are going to be for an impeachment. If the motion prospers, the President could be suspended for up to 180 days and taken to trial.

	In response to her imminent suspension and possible termination, Rousseff decided to take her case to Brazil&rsquo;s Supreme Court on Tuesday. Right now, it looks like the President&rsquo;s best hope is that Attorney General Eduardo Cardozo&rsquo;s request for the Supreme Court to annul the impeachment proceedings are successful &ndash; or at least heard.

	With the impeachment proceedings vote back on tack, shares of Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>), Vale SA (ADR) (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), Gol Linhas Aereas Inteligentes SA (ADR) (NYSE: <a class="ticker" href="/stock/gol#NYSE">GOL</a>), Gerdau SA (ADR) (NYSE: <a class="ticker" href="/stock/ggb#NYSE">GGB</a>), and other Brazilian companies were trading up on Tuesday. This was also the case for the Market Vectors Brazil Small Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) and the iShares MSCI Brazil Index (ETF) (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>).

	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

VALE

The Brazilian Giver: Maranhão Goes Back On Rousseff's Impeachment Annulment

Last Friday, Brazilian President Dilma Rousseff&rsquo;s impeachment looked like a sure thing after a Senate committee recommended a trial for the infringement of budget laws. This left the head state one step away from being suspended and replaced by Vice President Michel Temer.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/emerging-markets/16/05/7946315/brazilian-president-dilma-rousseff-one-step-away-from-impeach">Brazilian President Dilma Rousseff One Step Away From Impeachment</a></bzrelatedlink>
However, in an unexpected turn of events, the acting speaker of Brazil&rsquo;s Lower House of Congress, Waldir Maranh&atilde;o, decided to annul the vote issued on April 17, which had allowed for the decision to pass to the Senate, which would in turn hold a final ballot on Wednesday.
Maranh&atilde;o, who replaced Eduardo Cunha as the Speaker of the House after the latter was suspended due to alleged interference in the investigation of the Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>) corruption scandal, cited procedural flaws to justify his annulment of the Lower House vote. However, the head of the Senate committee, Raimundo Lira, <a href="https://twitter.com/SenadoFederal/status/729704806974160896">assured</a> that Wednesday&rsquo;s vote would still take place.
Amid the discussion, it is unclear if the vote will actually be held, and if Maranh&atilde;o&rsquo;s decision can be overruled by the Senate or the Supreme Court. Nonetheless, one thing is clear: Investors don&rsquo;t like uncertainty.
The iShares MSCI Brazil Index (ETF) (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) was trading down 1.75 percent, Petrobras lost more than 7 percent, the Brazilian real tumbled 0.66 percent and the Bovespa Index dropped almost 1.4 percent.
Editor Note: <a href="http://www.bloomberg.com/news/articles/2016-05-09/head-of-brazil-s-senate-says-rousseff-impeachment-motion-to-proceed">News recently broke</a> that despite the annulment decision, the Senate will move forward with the impeachment process.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Rousseff Impeachment Vote Surprisingly Annulled

The impeachment of Brazilian President Dilma Rousseff seems more tangible than ever, after a Senate committee recommended a trial for the infringement of budget laws, using funds from public banks to cover deficits in other areas. Now, all that&#39;s left is the full Senate&#39;s vote next week, and the odds are against Rousseff, who would be suspended for up to six months if the impeachment were approved.
<h3>
	A Look Back</h3>

	After Rousseff appointed former President Luiz In&aacute;cio Lula da Silva (who was said to be involved in the Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) corruption scandal) as her Chief of Staff, Congress started an impeachment process. Many politicians and analysts have described this as a coup in disguise. This led the Brazilian Democratic Movement Party (PMDB), Rousseff&rsquo;s own party, to leave the ruling coalition.

	With little supporters on the President&rsquo;s side, the Chamber of Deputies voted for the impeachment in April.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/04/7791200/brazil-from-the-ground-part-2-what-millennials-think-of-the-crisis">Brazil From The Ground, Part 2: What Millennials Think Of The Crisis</a></bzrelatedlink>
<h3>
	A Look Forward</h3>

	While Rousseff said she will not step down from her position, and classified Vice President Michel Temer as an &ldquo;usurper of the power,&rdquo; she will have no choice if the Senate approves her impeachment.

	If this were the case, the Brazilian President would be replaced by Temer, who has been a strong supporter of the impeachment and will not face inquiry over his implication in the Petrobras scandal, federal investigators confirmed this week.

	All Rousseff&rsquo;s opposition needs now is a simple majority at the Chamber of Senators, where it&#39;s said to count on 41 votes (50.6 percent) already. However, the President recently assured she &ldquo;will resist until the last day.&rdquo;

	Check out the BBC graph explaining the process:

	<img alt="" src="https://www.benzinga.com/files/u82070/_89288417_brazil_impeachment_v2_624in.png" />

	Source: BBC

	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Brazilian President Dilma Rousseff One Step Away From Impeachment

Ahead of Sunday&#39;s vote by Brazil&#39;s lower house of congress to impeach President Dilma Rousseff, exchange traded funds investors did not scamper into ETFs tracking Latin America&#39;s largest economy in big numbers.

	As of 12 a.m. Eastern time, 439 votes had been cast in Brazil&#39;s lower congressional body with <a href="https://twitter.com/StefSimanowitz">321 voting in favor of impeachment</a>. The number needed to move the vote over to Brazil&#39;s senate is 344. Once the senate considers Rousseff&#39;s fate, a simple majority is all that is needed. The vote to impeach Rousseff took place less than 110 days from Brazil&#39;s hosting of the 2016 Summer Olympics.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/03/7772039/brazil-from-the-ground-what-right-and-left-are-saying-about-the-crisis">Brazil From The Ground: What Right And Left Are Saying About The Crisis</a></bzrelatedlink>

	Speculation that Rousseff&#39;s grasp on power is tenuous at best and that impeachment is a real possibility are among the primary reasons the iShares MSCI Brazil Capped ETF (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) is up more than 43 percent year-to-date, making it one of this year&#39;s best-performing single-country emerging markets ETFs. However, EWZ ebullience, though solid, was somewhat muted ahead of Sunday&#39;s impeachment vote despite predictions that<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7843748/next-week-could-be-huge-for-brazil-etfs"> a potentially big week</a> was coming for the largest Brazil ETF and rival funds.

	Last week, investors added just under $94 million to EWZ. That is not a bad haul, but it is small relative to the ETF&#39;s more than $3.1 billion in assets under management. Up nearly 28 percent this year, the Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) failed to attract new assets last week, but the Brazil small-cap ETF did not lose any capital, either.

	Investors also displayed tepid enthusiasm for ETFs that offer exposure to Brazil without the commitment of a single-country ETF like BRF or EWZ. For example, the iShares Latin America 40 ETF (NYSE: <a class="ticker" href="/stock/ilf#NYSE">ILF</a>), which is up more than 23 percent year-to-date, added about $43 million in new assets last week. Solid, but small when considering the ETF has $745.5 million in assets. ILF devotes almost half its weight to Brazilian stocks and all of the ETF&#39;s top 10 holdings are Brazilian or Mexican names.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/04/7791200/brazil-from-the-ground-part-2-what-millennials-think-of-the-crisis">Brazil From The Ground, Part 2: What Millennials Think Of The Crisis</a></bzrelatedlink>

	In what is arguably the clearest sign that some aggressive traders are either ready to take profits in Brazil ETFs or were merely trimming exposure ahead of Sunday&#39;s impeachment vote, the Direxion Daily Brazil Bull 3X Shares (NYSE: <a class="ticker" href="/stock/brzu#NYSE">BRZU</a>) lost $10 million in assets last week.

	BRZU, the triple-leveraged answer to EWZ, has more than doubled this year, but it is easy to see why traders reduced exposure to the ETF ahead of Sunday&#39;s vote. Over the past month, only one of Direxion&#39;s leveraged bullish ETFs has been more volatile than BRZU, according to issuer data.

	For the five days ending April 14, BRZU saw a modest decline in volume as its turnover for that period was 4.3 percent below the trailing 20-day average, <a href="http://www.direxioninvestments.com/wp-content/uploads/2014/03/Direxion-Daily-ETF.pdf?utm_campaign=Daily%20Performance%20Email%20041516&amp;utm_medium=email&amp;utm_source=Eloqua&amp;elqTrackId=cdd24884d4824208a461b507e9f7eb11&amp;elq=981899e064544a6d92ecc36aef8b7f4e&amp;elqaid=2231&amp;elqat=1&amp;elqCampaignId=1423">according to Direxion data</a>.

Long Ideas

Pre-Market Outlook

BRZU

ETF Investors Were Skittish Ahead Of Brazil Impeachment Vote

As the Brazilian real depreciated and corruption scandals linked high level government officials &ndash; many of which have been arrested &ndash; to massive bribery cases at state-controlled oil company Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>), Brazil&rsquo;s crisis seemed to be hitting a bottom. However, the base was never hit, and things got worse instead.
As the corruption scandal unraveled, former President Luiz In&aacute;cio Lula da Silva was brought in by the police for questioning. In a daring move, current President Dilma Rouseff appointed Lula da Silva as her Chief of Staff, leading many of her critics to accuse her of wanting to shield the former president from prosecution.

	Reacting to this appointment, Judge Sergio Moro, who was in charge of the Operation Car Wash ("Operação Lava Jato") investigation, released to the public roughly four dozen tapes featuring phone conversations between Lula da Silva and several high-ranking politicians, government officials, judges and business executives. The tapes led many Brazilians to take the streets. Massive protests against Rouseff crashed with equally massive demonstrations against Moro.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/03/7772039/brazil-from-the-ground-what-right-and-left-are-saying-about-the-crisis">Brazil From The Ground: What Right And Left Are Saying About The Crisis</a></bzrelatedlink>
	While Rouseff has not been implicated in the Operation Car Wash, Congress has started an impeachment process &ndash; approved at a plenary session, arguing that she had manipulated government data to conceal the actual dimension of the economic crisis in Brazil. Furthermore, on Tuesday, Rouseff&rsquo;s own party, the Brazilian Democratic Movement Party (PMDB), left the ruling coalition, making an impeachment more likely as support in the Congress is central to this decision.

	Rouseff has denied all charges, and characterized the impeachment process as a coup attempt (please see footnote on military interventions in Latin America). While fears of a military intervention take over the Brazilian society, how are young people living the situation?

	Benzinga spoke with several Millennials in Brazil. While they shared their thoughts and interpretations, they all asked not to be identified, assuring that the political situation was so heated that anything one said could be used against him/her.

	Benzinga: Could you explain briefly what&rsquo;s going on?

	A graduate student explained how she understood the issue. &ldquo;The society is very divided, politically and ideologically. There are constant demonstrations, and it is very common that conflicts between different positions take place at the expense of the real problems that the country is undergoing.&rdquo;

	A government-funded artist shared his view. &ldquo;The political crisis has made the economic crisis much larger. In the end, we can say there&rsquo;s a culture of maintaining the crisis to put an end to Dilma&rsquo;s government.&rdquo;

	&ldquo;The most ridiculous thing is that Dilma is not being investigated for the Lava Jato Operation. However, the media connects her so much with people involved in the matter, that the crowd believes that all of the left is involved&mdash; In fact, most people I know believe Dilma is being impeached because of Lava Jato,&rdquo; he continued. &ldquo;One way or another, the idea of a coup is being discussed&mdash; a lot! And it&rsquo;s not an impeachment, because that requires criminal wrongdoing from the President. Since that did not happen, the impeachment is political, and thus, more of a coup than an actual impeachment.&rdquo;

	Another government-funded artist supplemented, &ldquo;what&rsquo;s worrying is that people are going crazy, getting into fights in the streets, hitting people wearing red [...] It feels like a very fascist climate.&rdquo;

	In a very short statement, a high-level employee of the Office of the Comptroller General (CGU), a Federal Government agency in charge of &ldquo;defending public assets and enhancing management transparency through internal control activities, public audits, corrective and disciplinary measures, corruption prevention and combat, and coordinating ombudsman&#39;s activities,&rdquo; said, &ldquo;Working for the State, I find myself in a complex situation. On the one hand, I see the great agenda in social development, democratization and modernization that Dilma&rsquo;s administration had &ndash; because, even though nobody talks about it, PT governments are very effective in modernizing the management. On the other hand, these practices are corroded by poor political practices.&rdquo;

	Finally, a veterinarian and e-commerce owner stated, &ldquo;the situation in Brazil is not good; it&rsquo;s affecting everyone. And, I think the situation cannot be controlled&mdash; so many politicians are corrupt, and there&rsquo;s so much money involved. In addition, there&rsquo;s not enough information on the media; us, Brazilians, don&rsquo;t know if everything is true or not, because we don&rsquo;t trust the politicians.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/03/7776533/brazil-political-party-pulling-away-from-president">Brazil Political Party Pulling Away From President</a></bzrelatedlink>
Benzinga: How is the political crisis affecting the economy? What about everyday life?

	The student cited above said she had undergone no &ldquo;significant changes&rdquo; in her life. However, &ldquo;there has to be constant adaptation in times like this,&rdquo; she stated.

	&ldquo;The economy is kept on hold [...] The companies investigated in the Lava Jato Operation are the motor of the economy and of the big infrastructure projects in Brazil,&rdquo; the artist explicated. &ldquo;As no new projects are undertaken, a lot of people go out of a job&mdash; and that makes things even worse.&rdquo;

	&ldquo;For those who work with culture, things are equally bad. Or worse. Government projects are all on stand-by, the government apparatus is on a hiatus, until the impeachment issue is resolved,&rdquo; he added.

	A well-known financial analyst also shared her experience. &ldquo;Economically, the situation has not affected me yet, since I still have my job. However, the political crisis has its impacts on the financial world&mdash; Many investors left the country, leading to a capital flight, while consumers trimmed their expenses. This led to falling returns, job cuts and, I&rsquo;m not gonna lie to you, we&rsquo;re worried about our jobs.&rdquo;

	&ldquo;Outside the employment context, for my part, I lost credibility in the government. I think it&rsquo;s a complete lack of respect toward the people, a total hoax,&rdquo; she added.

	Benzinga: People talk a lot about the role of the press in the crisis. What&rsquo;s going on with the press?

	Another college student explained that &ldquo;the media, as possessor of great power over society, has been standing against the current government and constantly pointing out problems that, according to them, were caused solely by the government.&rdquo;

	The artist then went into Brazilian media, which, he pointed out, is concentrated in the hands of &ldquo;five powerful families that are constantly intervening in the country&rsquo;s central decisions.
&ldquo;To me, what we&rsquo;re living today is a dispute of narratives,&rdquo; he added. &ldquo;The media has divided the country, and has spent years trying to incriminate the PT with all kinds of lies, some more elaborate, other ones, just clumsy.&rdquo;
&ldquo;In the end, no one knows what&rsquo;s really going on.&rdquo;

	The financial analyst briefly talked about the media, which, she assured, &ldquo;turned all this into a circus, a joke.&quot;

	Benzinga: What do you think about Lula da Silva&rsquo;s return and Rouseff&rsquo;s impeachment?

	An environmental engineering student who declared having voted for Lula when he got elected President, assured she would not vote for him again. The PT (Workers&rsquo; Party) has been &ldquo;paying people off with the &lsquo;bolsa familia&rsquo; plan, to keep them voting for them.&rdquo; So, &ldquo;I would be very glad if she left ASAP,&rdquo; she added.

	The second college student also went into Rouseff&rsquo;s impeachment. &ldquo;I do not think we&rsquo;ll see an impeachment, but I believe that, in the upcoming elections, the PT will have great difficulties to get reelected.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7725892/rousseff-is-a-problem-for-brazil-leveraged-etf">Rousseff Is A Problem For Brazil Leveraged ETF</a></bzrelatedlink>
	The artist also shared an explanation of the impeachment process. &ldquo;The political characters involved in this story are much more dire figures that you can imagine. A lot of them are, in fact, criminals. About 1/3 of the legislators that are going to vote for the impeachment are currently being investigated for criminal activities.
&ldquo;Last week, a list that linked about 300 politicians from the opposition party to the Odebrecht Conglomerate emerged but the media did not cover that.&rdquo;

	The vet and e-commerce owner also went into the Lula subject. &ldquo;Lula is the best president that Brazil has known so far. However, everything that is going on now is a response to the stealing that took place during his government. Dilma, on the other hand, is not doing a good job. Brasil is undergoing one of the largest crisis ever. But, I think her departure, and the ascent of Michel Temer will not help at all.&rdquo;

	&nbsp;

	Note on military interventions in Latin America: Latin America has witnessed numerous military interventions and coups in the recent past, and the consequences have been dire. The costs were not only economic, but could also be counted in thousands of human lives. Their practices have often been characterized as &ldquo;State Terrorism.&rdquo;

	For instance, the dictatorship that took place in Argentina between 1976 and 1983 is said to be responsible for the &ldquo;disappearance&rdquo; of roughly 30,000 people.

	&nbsp;

	Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
Image Credit: <a href="https://pixabay.com/en/brazil-patriot-flag-1164513/">Public Domain</a>

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Brazil From The Ground, Part 2: What Millennials Think Of The Crisis

Brazil has been in trouble for a while, as the real depreciated and corruption scandals linked high level government officials &ndash; many of which have been arrested &ndash; to massive bribery cases at state-controlled oil company Petroleo Brasileiro SA Petrobras (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) (NYSE: <a class="ticker" href="/stock/pbr-a#NYSE">PBR-A</a>). However, when it seemed things could not get any worse, the real explosion came when former President Luiz In&aacute;cio Lula da Silva was brought in by the police for questioning.

	What happened next might surprise. In a bold move, current President Dilma Rouseff appointed Lula da Silva as her Chief of Staff, leading many of her critics to accuse her of wanting to shield the former president from prosecution.

	In response to this appointment, Judge Sergio Moro, who was in charge of the Operation Car Wash (Operation Lava Jato) investigation, made public roughly four dozen tapes featuring phone conversations between Lula da Silva and several high-ranking politicians, government officials, judges and business executives. The tapes led many Brazilians to take the streets. Massive protests against Rouseff crashed with equally massive demonstrations against Moro.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7725892/rousseff-is-a-problem-for-brazil-leveraged-etf">Rousseff Is A Problem For Brazil Leveraged ETF</a></bzrelatedlink>

	While Rouseff has not been implicated in the Operation Car Wash, Congress has started an impeachment process &ndash; approved at a plenary session, arguing that she had manipulated government data to conceal the actual dimension of the economic crisis in Brazil.

	Rouseff has denied all charges, and characterized the impeachment process as a coup attempt (please see footnote on military interventions in Latin America). While fears of a military intervention take over the Brazilian society, how are people from both sides of the ideological spectrum living the situation?

	Benzinga spoke with highly influential people in Brazil. While they shared their thoughts and interpretations, they all asked not to be identified, assuring that the political situation was so heated that anything one said could be used against him/her.
Benzinga: Could you explain briefly what&rsquo;s going on?

	A very well-known left-wing activist and leader (let&rsquo;s call him Mr. L) explicated: &ldquo;The conflict is just huge.&rdquo;
&ldquo;The two main actors: government and right wing sectors.&rdquo;
However, he added, &ldquo;People are fighting over the wrong issues.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/03/7743738/morgan-stanley-brazil-politics-and-improved-oil-market-l">Morgan Stanley: Brazil Politics And Improved Oil Market Lifts Petrobas</a></bzrelatedlink>
A business intelligence specialist working on accelerating startups, who declared he stood on the far right end of the political spectrum (let&rsquo;s call him Mr. R), also pointed out the &ldquo;highly conflictive&rdquo; nature of &ldquo;the political issue in Brazil right now,&rdquo; adding he does not like exposure.
&ldquo;Talking about these things right now is troublesome [...] It could get me in a real pickle.&rdquo;
&ldquo;This is the first time that the Brazilian people have actually talked about politics,&rdquo; Mr. R continued. &ldquo;We never talked about this before. Now, we discuss politics at the pub, at schools, at work, even at churches and temples&mdash;.&rdquo;
&ldquo;The largest division is that between those who support the PT and those who support Sergio Moro, the judge in charge of the Operation Car Wash investigation, which involves high level government officials and business executives,&rdquo; he went on to explain.
&ldquo;What we have right now is a cultural war. And politics right now are hotter than soccer or soap operas. We&rsquo;re witnessing a live House of Cards,&rdquo; Mr. R said humorously &ndash; yet, actually meaning what he said.
Benzinga: How is the political crisis affecting the economy? What about everyday life?
The aforementioned left-wing activist assured that, economically, nothing has changed. &ldquo;I still have a job, I can still live my life normally,&rdquo; he stated.
 &ldquo;However, my everyday life has changed a lot. I&rsquo;m well known in Brazil for participating and leading left-wing movements [...] And that is causing a lot of trouble right now.&rdquo;
&ldquo;I&rsquo;m being hounded; there are places in my city where I cannot go [...] I cannot talk to the press, or express my political views. And that has me worried.&rdquo;
&ldquo;The climate in Brazil right now, the mood, is not very democratic. Quite the opposite, I&rsquo;d say.&rdquo;
One of the best-known architects and builders in northern Brazil ("The Architect," going forward) seemed to disagree with Mr. L.
 &ldquo;The crisis in my sector is very, very big,&rdquo; he expounded. &ldquo;The civil construction sector was one of the most affected, since large builders tend to borrow money from banks to finance construction. And, since this government had to tighten credit restrictions, getting a loan became a lot harder. This affected production as a whole.
&ldquo;However, not all sectors of the economy have been affected in the same dimension.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7462425/brazil-etfs-rise-stokes-volume-spike-in-leveraged-counterpart">Brazil ETF's Rise Stokes Volume Spike In Leveraged Counterpart</a></bzrelatedlink>
Mr. R, for his part, assured that &ldquo;Brazil&rsquo;s economy is screwed, regardless of the crisis. The PT [Workers Party] forgot the economy and took all the wrong steps.&rdquo;
&ldquo;High unemployment, new taxes every day&mdash; all of this did not help those who wanted to produce. Hence, companies needed to shrink and/or close [...] As the crisis worsens, the entire population can see the size of the hole.&rdquo;
&ldquo;In fact, the economic problem in Brazil is larger than the political crisis,&rdquo; he concluded.
Mr. R went back into the economic issue later during the conversation. &ldquo;Us, Brazilians, are &lsquo;poor&rsquo; right now. Our currency depreciated and, therefore, everyone (rich, poor, very wealthy) is taking a hard look at their expenses and trying to save money,&rdquo; he elaborated.
&ldquo;In the business world, closing deals is getting very hard due to (1) political instability and (2) long-term projects no longer make sense, because we do not know what will happen tomorrow and every company out there is complaining about high costs. Obviously I&#39;m talking about the majority, because in every crisis there are opportunities, and it&rsquo;s no different here,&quot; he added
A doctor living in São Paulo ("The Doctor") affirmed that the economic situation is &ldquo;terrible right now. But only for those who don&rsquo;t have any money [...] I have personally felt no changes. I still live a fantastic life, and so does my family. However, it is true that our family business generates less revenue than it used to,&rdquo; she revealed.
Benzinga: People talk a lot about the role of the press in the crisis. What&rsquo;s going on with the press?
Mr. L assured &ldquo;The press behaves like a political party&mdash; and that is hurting democracy.&rdquo;
Interestingly, The Architect and Mr. R seemed to agree. The former explicated, &ldquo;Big media in the Northeast is very biased. They clearly don&rsquo;t like the government, and they have no problem showing it.&rdquo;
Mr. R also agreed with the others. &ldquo;Brazilian media just sucks,&rdquo; he said. &ldquo;However, we have an increasing number of new internet portals that are more impartial.&rdquo;
Benzinga: What do you think about Lula da Silva&rsquo;s return and Rouseff&rsquo;s impeachment?
Mr. L then went into the President&rsquo;s impeachment. &ldquo;Impeaching Dilma is one step away from a coup [...] And that would hurt Brazilian democracy so much.&rdquo;
&ldquo;It could even lead to some kind of civil war,&rdquo; he stated.
Regarding the impeachment, Mr. R said very little, but suggested he was not completely against the idea, &ldquo;Claims are really serious now.&rdquo;
&ldquo;[Dilma] is a hostage of the PT [...] She has lost her political power within the government, and with the people.&rdquo;

	The Doctor seemed to agree with Mr. R. &ldquo;We all hate Dilma, we all protest against her, and want her impeached. And I agree,&rdquo; she voiced strongly, and quite angrily.

	Finally, talking about Lula da Silva&rsquo;s return to the government, Mr. R stated, &ldquo;I am quite a right-wing guy, so I don&rsquo;t like Lula. He has soiled the image of the Brazilian left with the power project that he &ndash; and other leftist leaders in Latin America &ndash; have. His return as a Chief of Staff is nothing else than an attempt not to be arrested, and each one of his maneuvers proves that he is, in fact, a villain, the mafia leader who believes that he&rsquo;s above the Brazilian law. But he will be arrested! You take my word.&rdquo;
Note on military interventions in Latin America: Latin America has witnessed numerous military interventions and coups in the recent past, and the consequences have been dire. The costs were not only economic, but could also be counted in thousands of human lives. Their practices have often been characterized as &ldquo;State Terrorism.&rdquo;
For instance, the dictatorship that took place in Argentina between 1976 and 1983 is said to be responsible for the &ldquo;disappearance&rdquo; of roughly 30,000 people.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
Image Credit: <a href="https://pixabay.com/en/rio-de-janeiro-corcovado-brazil-rio-809755/">Public Domain</a>

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